Post-Memorial Day surge sends gas prices higher ahead of the July 4 travel weekend, but greatest hike could be further on the horizon.
SOPA ImagesGetty Images- National gasoline price average rose to $4.94 a gallon on June 7, according to AAA, after reaching $4.62 during the Memorial Day weekend.
- Industry watchers disagree on when the national average will reach the $5.00 mark, though over a dozen states have already surpassed this price individually.
- A higher price for Brent crude is still expected to materialize later this year that could top the momentary March 2022 highs, remaining for a longer sustained period.
Just over a week ago, during the busy Memorial Day travel weekend, the national average gas price reached $4.62 a gallon, with some experts predicting it could top $5.00 a gallon by July 4. This milestone now appears likely to be reached much sooner than expected, with the national average having reached $4.94 a gallon today. This represents an almost $2.00 hike compared to this time in 2021, and is over 60 cents higher than merely a month ago.
Of course, in the days since Memorial Day weekend, which had traditionally been the peak summer travel holiday, not all states saw uniform increases in price. AAA notes that Michigan saw the highest weekly hike within the past week, with the average price in the state growing by 45 cents. Illinois and Indiana were not far behind with a hike of 41 cents, while Wisconsin and Ohio saw weekly increases of 39 and 38 cents, respectively.
In all, over a dozen states have already broken through the $5.00 mark.
California is still the absolute leader with a statewide average of $6.34, according to AAA, with individual gas stations now asking north of $8.00 a gallon in some counties, especially around the Bay Area. Nevada has managed to edge out Hawaii for the runner-up position, now seeing a $5.49 average, with the Pacific island state not far behind in third place with a $5.47 average. Pacific coast states Oregon and Washington now average $5.41 and $5.40 a gallon, respectively.
Does a $5.00 national average now seem like a best-case scenario by July 4?
“People are still fueling up, despite these high prices,” said Andrew Gross, AAA spokesperson. “At some point, drivers may change their daily driving habits or lifestyle due to these high prices, but we are not there yet.”
Individual states had broken through the $5.00 barrier a long time ago.
Mel MelconGetty Images
Oil industry expert Patrick De Haan cautioned on Twitter that a $5.00 national average may not be as close as it seems at the moment, indicating that gasoline markets could back off the post-Memorial Day increases before the next big holiday rolls around. De Haan also said the Chicagoland area, including northern Indiana and Milwaukee, could soon see some relief from the recent records.
“Memorial Day was bad enough, even though we didn’t drive all that far,” a family from Rhode Island told Autoweek. “We usually drive down to see our folks in Maryland for the 4th. We’re still planning to do it but it’s going to be ugly.”
Oil prices between July and the end of September are now expected to reach levels higher than were forecast just weeks ago, though there is some disagreement among experts and institutions on the duration of the predicted spike. Brent crude, which is now trading just below the $120 mark, could top $140 during the summer months, with some analysts forecasting $150.
Gas prices in individual cities have trended higher than in other parts of the state, as this photo from Manhattan demonstrates.
Spencer PlattGetty Images
Besides the timing of the expected nationwide $5.00 average, another important question is just when the price of gas will get high enough to actually drive down demand. This had appeared likely to happen after July 4 as travel slows down a bit before Labor Day. An earlier consumer pullback from driving before July 4 could push the $5.00 milestone back further.
“No, I don’t plan to drive less, and I don’t think I’ll see less traffic,” one driver from Virginia told Autoweek. “If you look at where airline tickets are, that seems like it’s actually a worse option. And you still have to deal with rental cars. If anything, I’m going to fly less because it’s a circus there.”
Officials in the Biden administration have signaled multiple times in recent weeks that its options are limited or non-existent at the moment when it comes to gas prices, pointing to Russia’s invasion of Ukraine. Simultaneously, the European Union’s planned implementation of a ban on 90% of Russian oil, set to go into effect later this year, is expected to push oil prices even higher as the EU looks for other sources of oil.
President Biden is scheduled to visit Saudi Arabia in July in an attempt to convince the country to increase its oil output, which could drive oil prices down over time. But there is uncertainty over just how much this attempt, if actually successful, could lower prices for US consumers and when that relief could arrive.
Keyword: US Gas Price Average Nears $5.00 a Gallon